Caesar Kirk 2018 BA Thesis

Ashesi University College
THE EFFECT OF PERFORMANCE APPRAISAL ON EMPLOYEE

MOTIVATION IN TWO PUBLISHING FIRMS.
BY
KIRK KABU CAESAR
Undergraduate thesis submitted to the Department of Business Administration, Ashesi

University College. In partial fulfilment for the award of Bachelor of Science degree
in Business Administration
Supervised by: Dr. Enyonam Kudonoo
April 2018
EFFECTS OF PERFORMANCE APPRAISAL ON EMPLOYEE MOTIVATION II
ACKNOWLEDGEMENT
I will like to say a big thank you to God Almighty for seeing me through
writing my undergraduate thesis. I will like to say thanks my supervisor Dr Enyonam
Kudonoo to having patience and guiding me through writing my undergraduate thesis.
I will also like to thank my family and friends for supporting me through writing this
dissertation. I will also like to say special thanks to Kwesi Arthur for inspiring me in
tough times whilst writing this thesis. God richly bless you all.
EFFECTS OF PERFORMANCE APPRAISAL ON EMPLOYEE MOTIVATION III
DECLARATION
I hereby declare that this Thesis is the result of my own original work and that no part
of it has been presented for another degree in this university or elsewhere.
Candidate’s Signature: ..............................................................................
Candidate’s Name: Kirk Kabu Caesar
Date: April 2018

EFFECTS OF PERFORMANCE APPRAISAL ON EMPLOYEE MOTIVATION IV
ABSTRACT
The purpose of this study is to find the effect of performance appraisals on
employee motivation and it influences the output of employees and the potential
outcome on the firms. The study employs data gathered from face-to-face interviews
from two companies. Data were analysed by categorizing the responses from
participants and use them to develop themes to answer the research questions. The
results of the study showed that performance appraisals do have effects on the
motivation of employees and consequently, the potential productivity of the firm.
Upon further analysis the study revealed that intrinsic/personal motivation affects the
effectiveness of extrinsic motivation mostly in the form of incentives. The study also
showed that perceived fairness and objectivity can affect the effectiveness of
performance appraisals in motivating employees. Based on these findings, it is
suggested that organizations should put in more effort to improve upon their appraisal
systems to boost the motivation of their staff for high productivity.
Keywords: Performance appraisal, Employee motivation, Effects

EFFECTS OF PERFORMANCE APPRAISAL ON EMPLOYEE MOTIVATION V
Table of Contents
ABSTRACT.................................................................................................................... II
CHAPTER 1: INTRODUCTION ................................................................................... 1
1.1 Background of the Study................................................................................. 1
1.2 Statement of the Problem ................................................................................... 2
1.3 Theoretical Framework ..................................................................................... 4
1.4 General Objective .............................................................................................. 6
1.5 Specific Objectives ............................................................................................ 6
1.6 Research Questions ........................................................................................ 6
1.7 Significance of Study...................................................................................... 7
1.8 Organization of Study ........................................................................................ 7
CHAPTER 2: LITERATURE REVIEW..................................................................... 9
2.1 Introduction....................................................................................................... 9
2.2 Performance Appraisal ....................................................................................... 9
2.3 Equity Theory of Motivation ........................................................................... 12
2.4 Expectancy Theory of Motivation .................................................................... 14
2.5 Reinforcement Theory of Motivation ............................................................... 16
2.6 Performance appraisals and Employee Motivation ............................................. 16
2.7 Conclusion ..................................................................................................... 18
CHAPTER 3: METHODOLOGY ................................................................................ 20
3.1 Introduction..................................................................................................... 20
3.2 Research Design .............................................................................................. 20
3.3 Research Scope................................................................................................ 21
3.3.1 Study Population .......................................................................................... 21
3.4 Sampling Strategy ........................................................................................... 21
3.4.1 Sampling Technique ..................................................................................... 21
3.4.2 Sample Size ................................................................................................. 21
3.5 Data Collection ................................................................................................ 21
3.5.1 Data Collection Instrument........................................................................... 21
3.5.2 Data Collection Procedure................................................................................... 22
3.5.3 Data Preparation, Collation and Processing .................................................... 22
3.7 Ethical Considerations...................................................................................... 24
3.8 Limitations ..................................................................................................... 24
CHAPTER 4: FINDING & ANALYSIS ....................................................................... 26
4.1 Introduction ................................................................................................. 26
4.2.1 Findings and Analysis from Kabkork Publications Limited ......................... 26
EFFECTS OF PERFORMANCE APPRAISAL ON EMPLOYEE MOTIVATION VI
4.2.2 How do performance reviews impact the motivation of an employee? .......... 27

4.2.3 What effect does employee motivation have on the output of a
firm/organization? ................................................................................................... 29
4.2.4 How do appraisal methods impact employee motivation? ............................ 31
4.2.5 Incentives................................................................................................. 33
4.2.6 Personal/Intrinsic Motivation..................................................................... 34
4.3 Findings from Winmat Publishers Limited ..................................................... 36
4.3.2 How do performance reviews impact the motivation of an employee? .......... 37
firm/organization? ................................................................................................... 38
4.3.4 Incentives................................................................................................. 39
4.4 Conclusion................................................................................................... 40
CHAPTER 5: CONCLUSION ...................................................................................... 43
5.1 Summary .................................................................................................... 43
5.2 Key Findings................................................................................................ 44
5.3 Recommendations ........................................................................................ 45
REFERENCES............................................................................................................. 46
APPENDIX................................................................................................................... 50
EFFECTS OF PERFORMANCE APPRAISAL ON EMPLOYEE MOTIVATION 1
CHAPTER 1: INTRODUCTION
1.1 Background of the Study
Performance appraisal is essential to most organizations because it is the most
powerful and effective instrument for keeping employees happy and motivated on the
job (De Cenzo, & Robins, 1994; Dessler, 2008). Performance is the way someone or
something functions. Appraise is derived from the Latin word “pretiare”, which
means to value. (Coens & Jenkins, 2000). To value in this perspective means to take
good care of, monitor progress to promote growth, and ensure the employee involved
is happy and motivated. An appraisal can therefore be described as a process in which
employee’s performance is evaluated based on a set boundary, agreed time frame,
guidance and a set standard. Combining these definitions, it may be concluded that
performance appraisal is the process of evaluating the way in which someone is
functioning based on set standards.
Effective performance appraisal has several benefits both to the organization
and employees. Examples of such benefits include giving feedbacks in a positive way
to enable employees to improve their performance on the job. Results of performance
appraisals enable employers to give appropriate rewards and incentives to employees
that are hardworking and excelling at their roles. It is used to build a dossier on
termination of low performing employees and to select those that need training to
improve performance or for promotion and career development. Other benefits of
appraising performance are that it helps organizations track the progress of their
employees and hold them accountable to the organizations goals. Organizatio nal
growth cannot be a reality if the performance of its workers is not appraised for
improvement or reinforcement of performance. Performance appraisals are also
crucial for career development of the employee and drawing succession plan for the
organization. Performance appraisals provide a recognized, recorded, customary
assessment of an individual’s routine, and a sketch for potential enlargement.
( Panagar, 2009). These benefits show the importance of appraisal to organizations.
According to Donegan (2002), "success will to a larger extent depend on the
organization's ability to evaluate progress and hold accountable those charged with
executing certain tasks" (pp. 233). Thus, performance appraisals seek to evaluate the
performance of an employee against standard or goals set by the organization and
even take corrective actions if need be. (Fatma, 2017)
According to Bennet (2002), employees of an organization are vital to the
growth and success of the organization and in many cases, employees reflect their
organizations. He further explains that people working for an organization, are the
most valuable, the costliest, and the most volatile of all the resources that it can use to
accomplish its work (Chaponda, 2014).
1.2 Statement of the Problem
The situation in Ghana is that some managers and supervisors do not properly
use performance appraisals as the tool or instrument it was designed to be. Objectivity
is usually lost when carrying out appraisals because some managers put personal
judgements and prejudices held against some employees before carrying out this task.
Performance appraisals are also flawed because sometimes the contrast effect comes
to play when employees are compared to fellow employees by their managers or

supervisors, without considering personality differences, which affects the morale of
the employee. There are various errors such as the halo effect, recency error, horn
effect and contrast effect; that affect performance appraisals in many Ghanaian
organizations and although a few maybe subtle, many could be avoided (Gürbüz &
Dikmenli, 2007). This generates inaccurate performance appraisals of employees and
affects the morale of the employees and the repercussions extend to the business in
the long run. Horsoo (2009) highlighted in his work on the Barclays Bank Ghana
Limited that employees are with the views that, “The performance appraisal process
which is designed to be a developmental tool to enhance performance, had been
turned into a discriminatory, punitive and/or judgmental process, where cronyism and
biased considerations dominate rather than objectivity” (pp. iv)
From observation a significant number of Ghanaian employees have been
displeased with the way some supervisors carry out performance appraisals, because
they do not score well on the performance appraisal ratings because some supervisors
use performance appraisals as a form of vendetta, to give low scores to employees
they have issues with. Some employees in some organizations in Accra have
sometimes been threatened with performance appraisals by their superiors to get them
to tow the lines of their supervisors. Some employees are also threatened by the mere
fact that not being in the good books of their supervisor could get them bad scores for
performance during appraisal. On the other hand, not all employees seem to feel the
same way about performance appraisal ratings. In some companies especially
multinationals like Tullow Oil and General Electric, where appraisals are carried out
diligently and well it is noticed that there is a cordial relationship between supervisors
and colleagues unlike other organizations where the relationship between supervisors
and colleagues feels like a master-servant relationship.
For an employee to deliver on the job he/she needs a conducive work
environment to be able to work productively to deliver results desired from his/her
superiors. If performance appraisals are possibly hampering this conducive working
environment, then it is worth undertaking and discovering the relationship between
performance appraisals and employee motivation to help managers know, appreciate
and advise themselves on how to effectively conduct employee performance
appraisals. This can be achieved if appraisers have knowledge on theories that throw
light on how to effectively conduct appraisals and the consequences on the
organization if they fail to do so.
1.3 Theoretical Framework
The theoretical frameworks appropriate for this study are the reinforcement
theory, equity theory and the expectancy theory of motivation. the reinforcement
theory of motivation which was introduced by BF Skinner; an American psychologist,
and his associates states that an individual’s behaviour tied in with positive
consequences tends to be repeated and improved, but individual’s behaviour with
negative consequences tends not to be repeated (Skinner, B.F. 1957). It is great for an
organization to remain healthy unless these performance appraisals are not carried out
as intended. A good performance appraisal should contain constructive feedback,
allow the employee to assess themselves and communicate expectations and goals to
the employee so they can also track their performance. When these performance
appraisals are carried out inaccurately it makes performance appraisals an unfair

measure of an employee’s performance. Wrong use of appraisals to settle scores are
detrimental to the motivation and morale of employees, which may lead to the
employee performing poorly to the detriment of the company.
Likewise, the equity theory which was propounded by Adams (1963), also
states that individuals are motivated by fairness and if they identify inequities in the
input/output ratios of themselves and their referent group, they will seek to adjust
their input to reach their perceived equity (Adams, 1963). This implies that
employees are satisfied and even willing to improve their work if they see their hard
work, skillset and all they bring to the firm commensurately rewarded by their salary,
bonuses and appreciations in the form of awards. It also implies that when an
employee does not agree to the level of output he/she is getting from the input they
give, they are likely to lower their input to reach a balance with the output they are
receiving. The equity theory; in relation to the topic, explains that if performance
appraisals do not reflect the input of the employee, he/she is likely to be dissatisfied
and it could affect the output of the employee. However individual personalities and
abilities to respond to positive or negative criticisms may be a factor in this theory.
The expectancy theory which was propounded by Vroom, Lawler & Porter
(1964), suggested that the relationship between people's behaviour and performance at
work and their goals is based on factors such as personality, skills, knowledge,
experience and abilities. There is a positive correlation between efforts and
performance. The theory is based on the assumptions that an employee expects that a
favourable performance will result in a desirable reward and the reward will satisfy a
need of the employee. Thus, once the desire to satisfy the need is strong enough, the
employee will try to achieve certain performances (Vroom, Lawler & Porter 1964).
1.4 General Objective
The general objective of this study is to find out the effect of performance
appraisals on employee motivation in two publishing companies to see if it influences
the output of employees and overall firm productivity.
1.5 Specific Objectives
The specific objectives for my research outlined below
There is a general complain by Ghanaian customers/clients about the apathy of

employees they interact with whilst purchasing goods or services. This could
generally be linked to how motivated an employee is at his/her role. Although
motivation comes in different forms, performance review results could be important
in this regard. Thus, the specific objectives of this study are to:
1. Identify ways performance appraisals can be used to motivate employees.
2. Unearth the effect of motivated employees on the overall productivity of the
two establishments under study.
3. Suggest ways performance appraisals can be used to measure performance of
employees.
4. To find out the implications of demotivated employees on the two firms under
study.
1.6 Research Questions
1. How do performance reviews impact the motivation of an employee?

2. What impact does employee motivation have on the output of a
firm/organization?
3. How can performance appraisals be used to measure the performance of an

employee?
4. What are the implications of a demotivated employee to a firm/organization?
1.7 Significance of Study
This study is relevant because employee relations influence the total well-
being of an organization and as such an important process like performance appraisals
should be scrutinized so that it boosts the well-being of the organization rather than
bringing it down. Employee motivation can also be linked to the performance of an
organization because basically an organization is made up of employees working
together as one organism to achieve their goals and as such if an employee lacks
motivation it could reflect on the outcome and productivity of the organization. This
is relevant because once managers get to understand the relationship between
performance appraisals and employee motivation, it will inform their choice on how
to carry out performance appraisals to ensure that they maintain high motivation
amongst their employees. Current trends indicate that employees now switch jobs not
just because of monetary gain but also due to lack of motivation so it will be relevant
to managers to know the relationship and utilise it in their employee retention
strategies to obtain high retention rates.
1.8 Organization of Study
This study is presented in five (5) chapters. Chapter one presents the
introduction, which contains the background of the research, the problem statement,
general and specific objectives to be achieved at the end of the study and the
significance of the research study.

Chapter two consists of literature reviews of the research topic. It presents the review
of related literature on performance appraisal and employee motivation.
Chapter three discusses the methodology employed for the study. The chapter is
broken down into sub topics including procedure, population, sample selection,
sample size, data collection methods, analysis and limitations of the study.
Chapter four discusses the results from the responses of respondents of the study.
Chapter five gives the overview and conclusions drawn from the analysis of the study,
and recommendations on the findings of the research study
The next chapter provides a context for the study and demonstrates why it is worthwhile and
timely. It tries to convince the reader of the validity of the researcher’s assertions by
providing logical and empirical support (Vanderstoep, S. W., & Johnston, D. D.
2009).
CHAPTER 2: LITERATURE REVIEW
2.1 Introduction
Effective motivation of employees could have effects on their job satisfaction
which also translates into productivity of the firm. Performance appraisals which
measure the performance of employees tend to influence the overall motivation of an
employee. Understanding the relationship between performance appraisal and the
effect it has on employee motivation, could help managers in firms increase the job
satisfaction of the employees. Theories that talk about motivation in relation to
performance appraisals selected for this study include the reinforcement theory of
motivation and the equity theory of motivation. These theories give an explanatory
foundation and framework to which this research study can revolve around effectively
to be able to derive the relationship I seek to find between performance appraisals and
the effect it has on employee motivation. This chapter reviews literature on the
theoretical framework and existing work on the relationship between performance
appraisals and the effect it has on employee motivation.
The chapter is presented under sub-topics including performance appraisal, equity
theory of motivation, reinforcement theory of motivation, expectancy theory of
motivation and performance appraisals and employee motivation.
2.2 Performance Appraisal
A performance appraisal is a method by which the job performance of an
employee is measured, documented and evaluated by a manager or supervisor.
Performance appraisal is the process of assessing the performance of employees in

comparison to standards set and then giving feedback to the employees (Mathias &
Jackson, 2004). Most performance appraisals are a part of career development plan
and are made up of periodical reviews of employee performance within organizations.
Even though some employees and some managers dread performance appraisals, it is
extremely important to the growth and development of employees and the
organization. Santa (1990) wrote in her article that performance appraisals help keep
employees on target and on goal. Without periodic evaluation, an employee can
become stagnant and complacent, losing motivation and enthusiasm. Good work
habits can fade away through lack of acknowledgement, and bad habits can become
ingrained. She further explained that companies that regularly and effectively review
their employees’ performance tend to have less employee turnover, and that
employees have fewer illnesses and stress-related problems (Santa 1990). Although
appraisals help the employee to evaluate their performance and create room for
growth, it also has some flaws that sometimes come up in the process and these
become challenges to the objectivity of the performance appraisal process.
The challenges found in performance appraisals are because of it being
conducted within human institutions. Some of the recurring flaws found usually in
performance appraisals are bias; which is a personality-based tendency, either toward
or against something (Kumbhar, 2011), and stereotyping; which is classifying a
person into an affinity group (Afriyie, 2009). Recency error is a situation where
appraisers use only the last few weeks or month of a rating period as evidence of their
ratings of others (Qureshi et al., 2007), and lastly the halo error, where the evaluator
has a generally positive or negative impression of an individual, and the evaluator
then artificially extends that general impression to many individual categories of

performance to create an overall evaluation of the individual that is either positive or
negative (Jones & Wright, 2007).
In a related article by Lawler (2012), he explained that performance appraisal
systems are effective when they are based on goals that are jointly set by the
employee and his manager and are driven by an organization’s business strategy. The
use of competency models that are based on business strategy is strongly associated
with organizational effectiveness. He recommended that keys to effectively carry out
performance appraisals are training managers to do appraisals, holding them
accountable for how well they do appraisals and using measures of how results are
achieved (Lawler III, 2012).
Notwithstanding the fact that performance appraisal is a great tool to be used
by organizations, there is a tendency for managers and supervisors to abuse the
system by not keeping the integrity of the process. They do so by allowing personal
prejudices and personal relations as well as other reasons to affect their objectivity
whilst carrying out the performance appraisals. Davidson (1995) opined that the
increased use of performance appraisals results as evidence in courts is becoming a
great temptation for employers to manipulate performance appraisal results to avoid
the growing costs of litigation and compensation of disgruntled employees who may
take employers to court. Moreover, due to the nature of performance appraisals, the
appraiser can easily manipulate the result of the exercise (Davidson, 1995).
According to Tziner & Murphy (1999), appraisers who showed low levels of
confidence in the appraisal system, high levels of discomfort, or high levels of
instrumental commitment are more likely to provide ratings that were unusually high
or that did not discriminate well among employees and/or dimensions. On the other
hand, appraisers who showed higher levels of attitudinal commitment or who perceive
more risks associated with distorting ratings tend to provide lower ratings and to
discriminate among employees and/or dimensions. (Tziner & Murphy, 1999). Thus,
employees are going to sense and feel discrimination and inequity in the performance
appraisal process when comparing their appraisal responses to that of their colleagues
or referent group and once they identify such differences it may cause a problem of
apathy to the performance appraisal process by the employee and it may also cause
the employee to be demotivated.
2.3 Equity Theory of Motivation
The equity theory states that individuals are motivated by fairness and if they
identify inequities in the input or output ratios of themselves and their referent group,
they will seek to adjust their input to reach their perceived equity (Adams, 1963). This
implies that employees would be satisfied and even willing to improve their work if
they see their hard work, skillset and all they bring to the firm commensurately
rewarded by their salary, bonuses and appreciations in the form of awards. It also
implies that when an employee does not agree to the level of output he/she is getting
from the input they give, they are likely to lower their input to reach a balance with
the output they are receiving.
In a study by Selvarajan and Cloninger (2012) on Mexican employees, they
examined the relationship between performance appraisal characteristics (appraisal
source, appraisal purpose and feedback richness) and perceived reactions of
employees to the appraisal characteristics (perceived fairness and perceived accuracy

of appraisals) and appraisal outcomes (appraisal satisfaction and motivation to
improve). The results of the study showed that performance appraisals which the
employees perceived as fair had a positive effect on employees’ motivation and job
satisfaction. Also, employees preferred intangible appreciations such us respect and
dignity than rewards that come in the form of non-monetary outcomes, contrary to
what Kampkotter (2016) found in his study, that employees are motivated by
performance appraisals that are tied to only monetary outcomes. The results here may
be unique to Mexican employees because of their culture or history where they place
a high regard on the respect for other people. Accordingly, depending on the culture
of the people the nature of appraisal outcome rewards may vary (Selvarajan &
Cloninger, 2012).
In a related study by Cosier and Dalton (1983) on the equity theory reveals a
reverse reaction to inequity where equity theory suggests that an employee who
perceives that he/she is not being treated fairly like other employees may reduce his or
her inputs. However, the exact opposite may occur where the individual may redouble
efforts to gain approval especially when their output is questionable. This is contrary
to what Adams (1963) proposed that individuals are motivated by the fairness they
perceived equity. However, this result may be as a reaction to intentionally placing
inequity in the work place. Some individuals can leverage negative comments by
turning them into a source of motivation to prove others wrong and as such, it differs
from person to person. This also supports Kuvaas (2006) position on motivation, that
the motivation of an employee could possibly be mediated and moderated by the
individual. The conception that motivation of an employee could be controlled is also
seen in the expectancy theory of motivation where employees are motivated when
they act according to expectation and are rewarded according to what they expect to
receive for their input.
2.4 Expectancy Theory of Motivation
The expectancy theory states that employees are motivated to increase their input
when they believe that their efforts lead to higher performance, and the higher
performance will be rewarded by their organization or firm in a form that is valuable
to them (Vroom & Deci, 1983.) Once an employee creates expectations of his or her
performance and the reward that goes with it, they adjust their inputs to achieve their
expectation and they expect to be rewarded after achieving such performance. The
theory suggests that if employees have a strongly perceived connection between their
efforts and their outcomes, it will increase their motivation in the workplace. The
theory suggests that employees have different sets of goals and they can be motivated
when they believe that:
 There is a positive correlation between efforts and performance,
 Good performances will result in a receiving an expected reward,
 The reward will satisfy a need of importance to the individual,
 The drive to satisfy the need is strong enough to make the effort worthwhile.
(Vroom & Deci, 1983.)
Valence here represents to the emotional disposition people have with respect to
outcomes (rewards). It can further b explained as level of want of an employee for
extrinsic (money, promotion, time-off, benefits) or intrinsic (satisfaction) rewards.
(Vroom & Deci, 1983).

Expectancy
Employees have different expectations and levels of confidence about their
ability what they can do. Management must discover what resources, training, or
supervision employees need to stay motivated (Vroom & Deci, 1983).
Instrumentality
This refers to the perception of employees on what they will receive even if it
has been promised by a management. Management must ensure that promises of
rewards are fulfilled and that employees are aware of that (Vroom & Deci, 1983.)
Vroom suggests that an employee's beliefs about Expectancy, Instrumentality, and
Valence interact psychologically to create a motivational force such that the employee
acts in ways that bring pleasure and avoid pain (Vroom & Deci, 1983).
A study by Lawler and Suttle (1973) showed that expectancy beliefs can
predict behaviour but do not show that many of the more complex predictions
generated by the theory are valid. In a similar study by Reinharth and Wahba (1975),
showed that the theory's ability to explain human behaviour was at best a very limited
portion of human behaviour. The theory which based on the basis of rationality,
serves as a useful predictor in situations where contingencies between acts and
outcomes and between first-level and second-level outcomes are clearly perceived by
the individual, whereas ambiguous situations force the individual to develop a choice
mechanism not based on the expectancy variables (Lawler & Suttle, 1973). These
similar findings point out that the expectancy theory is a predictor of the behaviour of
an employee due to perceived outcomes associated with their acts in the work place.
However, these perceived outcomes are mediated by supervisors and managers, thus
the perceived outcome of the employee does not always materialise. This according to
the expectancy theory could lead to the decrease in the motivation of an employee
especially if the employee is denied his or her perceived outcomes although they
adjust their inputs to achieve higher performances.
2.5 Reinforcement Theory of Motivation
The reinforcement theory of motivation which was developed by (Skinner
1957) is a theory that describes human behaviour. He explained that an individual’s
behaviour tied in with positive consequences tends to be repeated and improved, but
individual’s behaviour with negative consequences tends not to be repeated (Skinner,
1957). LeBoeuf in his best-selling book, The Greatest Management Principle in the
World, says there are two important lessons that managers must learn if they are going
to get the best results from people and one of them is you get more of the behaviour
you reward. “You don't get what you hope for, ask for, wish for or beg for. You get
what you reward. Come what may, you can count on people and creatures to do the
things that they believe will benefit the most” (LeBoeuf, 1989. pp8). Thus what
(Skinner 1957) opined was that to get a particular result in the behaviour of an
employee you will have to reward or criticize their behaviour to reinforce the results
you like to see before you can actually get it since behaviour is as a result of constant
action.
2.6 Performance appraisals and Employee Motivation
Exploring the relationship between performance appraisals and employee
motivation, there has been some work done in different parts of the world on the
topic. Thus, looking at these studies would help give an idea of how far the existing
literature has covered in this area. Kuvaas (2006) in his article showed the relationship
between performance appraisal satisfaction and work performance. Both performance
appraisal satisfaction and employee outcomes mediated and moderated by employees’
intrinsic work motivation. The form of the moderation revealed a negative
relationship for employees with low intrinsic motivation and a positive relationship
for those with high intrinsic motivation. The article introduced a new variable as a
factor in determining the relationship between performance appraisals and employee
motivation which is the intrinsic self-motivation of the employee. Although the study
was done with 593 employees in the Norwegian banking sector, which is somewhat
small to generalize to a larger population across the world; however, it is worth noting
that intrinsic motivation could be a lurking factor in determining the relationship
between performance appraisals and employee motivation (Kuvaas, 2006).
In another study which analyses the effect of performance appraisals on
employees’ overall job satisfaction, the article differentiates between appraisals that
are linked to monetary outcomes, such as bonus payments and promotions, and
appraisals that have no monetary consequences. The results of the study showed a
significantly positive effect of performance appraisals on job satisfaction, which is
primarily driven by appraisals linked to monetary outcomes. Furthermore, the study
explored the moderating effects of personality traits on the relationship between
performance appraisals and job satisfaction. The results of this study suggest that
performance appraisals combined with extrinsic rewards (monetary and career-related
consequences) are a powerful human resource management tool that is appreciated by
employees. Hence, it seems to be very important that appraisals are linked to tangible
outcomes, such as a bonus, a promotion, or a pay raise. Performance appraisals with

monetary outcomes also come along with a stronger feeling of perceived recognition
from superiors. This article reiterates the same findings from, “What Makes
Appraisals Effective?” by Lawler, Benson, and McDermott (2012), that appraisals
which have monetary consequence, and, in this case, career related consequences
often tend be taken more serious than non-monetary appraisals. The finding also adds
on that appraisals with monetary ties tend to increase job satisfaction amongst
employees which may probably affect the motivation of the employee at work
(Lawler, Benson & McDermott, 2012).
2.7 Conclusion
The literature discussed in the preceding paragraphs, shows various arguments
about the relationship between performance appraisals and employee motivation.
Looking critically into the literature there are underlying factors that may or may not
affect the relationships observed in other studies. Some of these underlying factors
could be the geographical location of the study and the prevailing socio-economic
conditions in the countries in which the study was conducted. Another factor
discovered through the literature review is the personal intrinsic factors of employees
and how they react to performance appraisals and negative motivation. This brings to
light the fact that doing a qualitative research on the subject would be worthwhile. A
qualitative research would unearth the personal factors that affect the relationship
between performance appraisals and negative motivatio n. Also, all the literature
reviewed on the subject were done quantitatively. Thus, conducting a qualitative
study here would benefit this field of research by bringing a new perspective which is
an in-depth understanding of the topic from the knowledge and experiences of

employees and managers on the topic. My next chapter will therefore, discuss the
approach to this study, how I will go about it and the reasons behind it.
CHAPTER 3: METHODOLOGY
3.1 Introduction
The purpose for this study is to identify the effect of performance appraisals
on employee motivation in two publishing firms namely Kabkork Publication Limited
and Winmat Publishers Limited. This chapter describes the research method, data
collection and analysis procedure as well as limitations to the research. This chapter is
important for research study as it shows the outlay of the procedure for the study to
give other researchers the ability to understand the findings as well as use it for
further studies if needed.
3.2 Research Design
For this study, an exploratory approach to research is chosen because I will be
researching into an idea from my observation, which is based on different theoretical
frameworks. An exploratory study is usually done where a researcher wants to
understand a behaviour he or she has observed (Vanderstoep, S. W., & Johnston, D.
D. 2009) and in this case, this study strives to find out the relationship between
performance appraisal process and its effect on employee motivation. The choice of
qualitative approach for this research is to bring in-depth understanding to the
relationship between performance appraisal process and employee motivation.
Exploratory studies are also characterized by introducing a new perspective of
looking at the topic from a theoretical lens or a new method of collecting and
analysing data. This study looks at a different approach to existing data using a
qualitative instead of quantitative. Other researchers who have undertaken similar
studies also used exploratory since literature on this topic is less. A similar study such
as that of Akuoku (2012) also defined his approach as exploratory.

3.3 Research Scope
3.3.1 Study Population
The study is focused on the population of two publishing companies namely
Kabkork Publications Ltd and Winmat Publishers Ltd. The population includes all the
employees and management of the two publishing firms.
3.4 Sampling Strategy
3.4.1 Sampling Technique
For this study I will use purposive sampling technique to get my subjects for
the study. I would be carrying out my research in two publication firms thus I would
have to use purposive sampling to obtain the subjects who are directly related to the
research.
3.4.2 Sample Size
My sample consist of 8 employees from both companies; four (4) employees
from one company two (2) to make up my total sample and 2 management staff in
total.
3.5 Data Collection
3.5.1 Data Collection Instrument
I employed a structured interview guide to conduct interviews with the subjects
of the study. This tool allows me to capture in-depth experiences, knowledge and
expressions that I wish to obtain to contribute to my study. The structured interview
guide consists of the following questions:
1) How long have you been with the company?
2) How would you describe the performance appraisal method in the company?
3) How do you feel after going through the performance appraisal process?
4) Have you ever had a negative experience during performance appraisal?
5) Do performance appraisals affect your motivation to work?
6) Does personal motivation affect your motivation to work?
3.5.2 Data Collection Procedure
I visited the companies on different days and conducted a one-on-one
interview session with the employees of the company. Each interview session lasted
about 15 minutes per employee.
3.5.3 Data Preparation, Collation and Processing
For data preparation I made notes of the responses I received during the
interview process since it is an integral part of the research. I also audio recorded
eight (8) respondents who gave me their consent to do so. After the interview
sessions, I fed back my recording to participants to find out if they agreed with what
is recorded and what they said. I also sought for further explanations to ensure the
authenticity of interview results. I came out with memos from participant’s
responses. Memos are short notes of profound statements you identify from the notes
of an interview. I listened critically to the audio recordings of eight (8) respondents
who and fully transcribe the interview session. I organized my data by labelling and
archiving for easy access and analysis. I labelled and archived my data according to
information such as the index of the interviewee, the location of the interview and the
date and time of the interview. I created a record archive by developing a filing
system to keep my data safe and organized. I also made photocopies of the data and
kept the master copy for safekeeping.

3.6 Data Analysis
I analyzed my data using thematic analysis to develop themes from the
responses collated from the interviews carried out as a way of answering my research
questions and objectives. I also drew patterns and relationships between the responses
gathered. I made use of secondary data to form a framework of analyzing the
responses I receive from the interviews carried out. Qualitative data analysis involves
the identification, examination, and interpretation of patterns and themes in textual
data and determines how these patterns and themes help answer the research questions
of the study (Vanderstoep, S. W., & Johnston, D. D. 2009).
I went through my interview notes, interview transcripts and memos and made
comments about patterns, issues and themes that I came across. I then grouped my
data into subject matters based on the pattern, issues and themes I highlighted
previously. This helped me analyse my data systematically leading to identification of
relationships and patterns. Next, I organized my subject matter into categories and
then finally to main themes.
I put my main themes and data collected into focus and perspective by
comparing it with existing data and my objectives for the study as well. I then went
ahead to summarize my main findings under broad headings. I discussed the analysis,
arrived at conclusions and justified the conclusions and lessons learnt from the study.
3.7 Ethical Considerations
I sought the express permission from participants before I conducted the
interviews for the study. I sent introductory letters to the management of the selected
institutions; Kabkork Publications Limited and Winmat Publishers and sought their
approval before the commencement of the interviews and study. I also had a face-to-
face meeting with managements of the two companies to schedule the days and
periods as well as convenient hours to carry out the interviews in order not to abruptly
interrupt their daily work schedules. To go by the ethical principle of anonymity, I
omitted names and other forms of identification from the study. I made use of indexes
like respondent numbers to represent the participants and eliminated their identity
from the research study to prevent any possibilities of victimisation of the participants
after the study because of unpopular responses. The respondents were assured of
anonymity and that their responses would be aggregated with those of others. Their
participation in the research study and interview was voluntary and as such they could
stop and opt out during the interview or at any stage of the research process.
3.8 Limitations
The limitations of this study firstly, is that due to the qualitative nature of the
study, the findings of this research are not definitively conclusive and therefore
cannot be generalized to the entire population. The integrity of the process may be
affected by bias on the side of the researcher since he carries working knowledge of
both firms as well as on the side of the participants who may try to respond to answers
favourably.
Another limitation is that due to the nature of their work it was difficult meeting with
the employees of both firms and one of the firms only have a few of their employees
in Accra.
CHAPTER 4: FINDING & ANALYSIS
4.1 Introduction
This chapter discusses the findings of the study based on the data received
from the interviews of the two (2) publishing firms namely Kabkork Publications
limited and Winmat Publication Limited. The two (2) management personnel were
interviewed about the process and design of their company’s performance appraisals.
The analysis includes the responses obtained from the eight (8) interviews conducted
amongst the two companies. The responses I obtained, played a central role in
addressing the research questions and objectives of the study.
4.2.1 Findings and Analysis from Kabkork Publications Limited
Kabkork Publications Limited offer published learning materials to serve
educational and professional institutions and governments in promoting quality
education for every level. They are based in Tema and provide custom publishing
services for private firms as well.
The performance appraisal method or process being used by the company is
their third one, which is an improvement on the previous two. An interview with their
human resource manager enabled me to understand what this new method/process is.
He explained that the new method is more scientific in nature than previous ones.
Here he revealed that the appraisal process is in three (3) fold. The first one is a
performance plan where a performance plan is discussed with the staff according to
the company’s plan of action. The performance plan details an action plan for the four
quarters of the year with each activity accorded a percentage which counts towards
your final grade at the end of the year. For every said activity, upper and lower limits
of achievement are set by both the supervisor and supervisee and are signed by both
parties. This then becomes the working document on which performance appraisals is
based on and evaluated. Every employee is expected to score at least 80% of their
target set. The second aspect is where the supervisor also looks at behavioural aspect
of the staff at the work place and on duty. The supervisor investigates if he/she is
friendly to customers or not, especially since most of the staff are marketers and
salesmen. In the second aspect there is a quarterly monitoring and assessment system
and the performance plan is matched to their actual performance and then the
employee is scored based on their actual performance. The third part involves the
identification of training needs of the employee. A training program is usually
recommended for the staff after the quarterly assessments. In the third part too,
promotions can be recommended when an employee is constantly doing well and
even exceeding his/her targets. Termination of appointments could also be
recommended when employee is seen to be a liability to the company. He also
mentioned that they do a three-year appraisal compilation to award hardworking staff
to give them incentives, to motivate their colleagues.
4.2.2 How do performance reviews impact the motivation of an employee?
At Kabkork publications the employees all agreed to the fact that indeed
performance reviews influence the motivation of an employee. The respondents
responded affirmatively through the line of questioning to establish that performance
reviews do influence the employee’s motivation. However once again all the
employees spoke to a positive impact of performance reviews on the company. Each
of the employees responded to the interview question of “whether they have ever had
a negative experience during performance appraisal” Each of the employees spoke
about how they did not have any problem with the appraisal process or a particular
negative appraisal session they had. Staff interviewee 002 responded to the question if
he had had a negative appraisal experience by saying, “No, It rather challenges me to
give in better effort. When I go into our weekly appraisal and it doesn’t go well I
rather leave challenged to do better.”
All the respondents/employees from the company had similar responses on
how performance appraisals affect their motivation by saying that it actually either
challenged them or gives them positive feelings after the performance reviews. In the
responses from the employees, most of them seemed to respond on how they felt after
the performance appraisal process as being challenged, seeing this theme run through
most of the responses. Those who achieve their targets often leave the appraisal
process feeling approved and their work validated, and this gives them positive
emotions and increases their motivation to work and even work harder. For those who
might have fallen short of their targets feel challenged after going through the process
to improve their efforts to better achieve their targets. Thus, all the respondents’
affirmed they feel more motivated after performance appraisals/ performance reviews.
An example is staff interviewee 001 responding to how he felt after appraisal process
saying, “Personally, I think I was operating at my own level, standard, because over
here the environment is such that you can work at your pace but during the appraisal
process boss pushed and challenged my standard up, so I believed I could do better.”
“It makes me challenge myself all the time at work. I was operating at a standard I
felt was okay but after that the appraisal I felt like I had to do more.”
Another staff interviewee also had something similar to say when also asked
about how he feels after performance appraisal saying, “It rather challenges me to
give in better effort.” This also supports the theme of feeling challenged to do better
after going through performance appraisals which keeps the employee being
motivated. It also supports the reinforcement theory of motivation where explained
that an individual’s behaviour tied in with positive consequences tends to be repeated
and improved. Thus, once employees feel positive after a performance appraisal
session and feel motivated and validated, they are most likely challenged to repeat
their efforts and even improve upon it, which is evident in the responses received
from the interviewees of this firm.

firm/organization?
The motivation of an employee should be the concern of every organization
and we see that here with how some of the interviewees describe how their motivation
affects their work. According to Otley (1999), the performance of an organisation is
dependent on the performance of its employees and some other factors such as the
environment of the organisation and the organizational culture (Otley, 1999). This
author believe that an organization’s output or performance is as a direct reflection of
the output or performance of the employees. All the workers spoke to the effect that
performance appraisals motivate and challenge them and has led to the improvement
of their work output. The employees seem to take up the challenge from the
performance appraisal process and challenge themselves to perform better. Staff
interviewee 003 in response to how he felt after performance appraisals stated that,
“Oh I felt challenged to do more.” He also went on to say that, “If you check over the
years I have been improving my sales percentage so yeah it motivates me to achieve
more.” This shows that at least for that employee, his motivation has a significant
effect on his output and thus the overall output of the firm. This is not limited to only
this particular interviewee, but some other interviewees confirmed the same
relationship between employee motivation and the output of the firm. The effect is
not only positive; once an employee feels demotivated it would still influence the
output on the firm. Staff interviewee 002 in a response to whether or not personal
motivation may affect your motivation to work, he stated that, “Assuming you’re
coming to work and you do not feel like coming, your output that day will not be the
best because personally you’re not motivated so no matter the incentive that will be
put in place since it is within you, you will not produce the best.” Staff interviewee
001 also had a similar response. He stated that: “oh as for that one dierr, it affects
your performance because if there is something on your mind you can’t work well in
the office. If you’re happy you will work more faster and well if you’re not you
won’t.” These responses all speak to affirm the assertion that an employee’s
motivation influences the overall output of a firm; bringing into consideration the
importance of keeping employees motivated. Once employees are not able to work at
their best it will hamper the productivity of the firm which in turn affects the output.
Using Carter’s and Shelton’s performance formula; Performance = Ability ×
Motivation × Resources (2×2×2 = 8).
Looking at the equation carefully it shows that workers can have as much
ability and the necessary resources at their disposal but will still fail to perform if
motivation is missing in the equation. From the equation it can halve the performance
of an employee. In other words, all that equation is depicting is that without
motivation performance is usually below potential (Carter & Shelton, 2009), (Nduro,
2012). An employee’s performance is necessary for an organisation, since its
organisation’s success is dependent upon the employee’s creativity, innovation and

commitment (Ramlall, 2008) thus as an organization who aims to have its employees
bring out their best, the motivation of the employee must be a priority.
4.2.4 How do appraisal methods impact employee motivation?
From my interview with one of the management staff I found out that Kabkork
publications had previously used 2 different but not mutually exclusive appraisal
methods. Upon probing further through the interviews conducted with
staff/employees, I came to a realisation that the staff had different disposition to
previous appraisal methods than the current one the company is running. Most of the
staff interviewed described the new appraisal method as fair, which seems to be the
themed response for their thoughts on the appraisal system. Staff interviewee 004
described the current appraisal method saying, “The appraisal method is interactive
and fair. It allows everyone to know what is expected of them in every situation
throughout the entire year and it leaves room for interaction with the boss to even get
advice if any difficulty arise.” The description of “fair” brings to mind whether they
felt like the previous performance appraisal methods were somewhat unfair to them as
employees.
Looking at some responses after probing further, staff interviewee 003 was
asked to differentiate between the old appraisal system and the new one. His response
was: “Errrm, you know what, the earlier ones sometimes it leaves room for one to be
sceptical about some of the results after performance appraisals because we were
only judged based on target sales and the judgement of the supervisor but this new
one is more scientific and straightforward, so everything is fair.” “My appraisal

score has increased and so has my output.” Staff Interviewee 003 also went ahead to
say that under the current performance appraisals being carried out he/she has seen a
rise in his appraisal score and output. This could mean that under the previous
appraisal system which he/she may have perceived to be unfair, he/she was not
motivated enough to improve his/her performance. This could be an example of what
the equity theory stipulates; states that individuals are motivated by fairness and if
they identify inequities in the input or output ratios of themselves and their referent
group, they will seek to adjust their input to reach their perceived equity (Adams,
1963). This may mean that once he/she felt that the performance appraisal score was
not equal to the input he/she brings, he/she is likely to adjust his/her performance to
suit the score given. Since performance appraisals in this company is tied in with
incentives, he/she may sense inequity in the performance appraisal when he/she sees
other employees receiving incentives when he perceives they produce about the same
output. This may not necessarily mean that there is truly an inequity but once there is
no clear cut and objective means to verify that, he/she is left to their perceptions.
This brought to my attention that the type of appraisal system a company runs
may influence the level of motivation of the employee. Where employees cannot
sense or perceive the objectivity in the performance appraisals, they are left to
perceive inequity in any case they receive negative reviews during performance
appraisals. This may imply that the reason why all the interviewed staff feel motivated
after performance appraisal may be because of their perception of the process to be a
fair one because of its transparency and scientific basis. Thus, the method of
performance appraisal is likely to influence the motivation of a person.

4.2.5 Incentives
Incentives are one way to keep employees motivated and with the trend of
performance appraisals being tied in with incentives, it has become an ever-relevant
conversation when talking about employee motivation. Speaking on incentives I
found out that at Kabkork publications limited, that there are monetary and non-
monetary forms of incentives. An example of the monetary incentives that Kabkork
offers is 15% of the total value of your target if you achieve your target. An example
of non-monetary incentives they also have is promotions based on performance
appraisal scores as well as recognition at the annual business conference the company
holds.
Judging from the responses of the employees, monetary incentives are not the
only type of incentives appreciated but also the non-monetary ones. In response to
whether incentives boost motivation staff interviewee 002 said, “You see, motivation
comes in different ways; even for the fact that you’re mentioned in front of your
colleagues that you are the employee of the month is enough. So that alone even
without any cash, that feeling alone, to be been adjudged the best amongst my
colleagues, it will really motivate me.” From this response one can experience an
inner satisfaction with receiving non-monetary incentives which is emotional. It may
point to a relationship which is that, non-monetary incentives help improve
particularly the intrinsic motivation of an employee because they give the employee
some sort of emotional satisfaction. This is important to note because intrinsic
motivation is as important as extrinsic motivation which is the kind of motivation
caused by external factors. Thus, it important for organizations to praise their
employees where necessary during performance appraisals because it has the potential
of increasing their motivation. Reward schemes such which acknowledge hard works
such as citations, employee of the month awards will be instrumental too in
motivating the employee. This organization does not have this in place currently but
has plans of implementing such schemes soon. This is not to disregard monetary
incentives being attached to performance appraisal. As Kampkotter (2016) suggested
in his work, performance appraisals combined with extrinsic rewards (monetary and
career-related consequences) are a powerful human resource management tool that is
appreciated by employees. Thus, an organization that considers the motivation of its
employees should have a fair amount of monetary and non-monetary incentives in
mind to ensure that their staff stay motivated.
4.2.6 Personal/Intrinsic Motivation
Personal motivation is the same as intrinsic motivation which describes the
motivation an individual has within. This kind motivation is driven by internal
rewards that are satisfying for individuals. Personal motivation should also be a
concern to forward thinking organizations because it influences the output of the
organization.
Most of the responses to the interview question, whether personal motivation
affects their work, had affirmative responses to confirm that it actually does. Staff
interviewee 003 said, “What do you think? What do you think will happen if you come
to work feeling down from home because maybe you had an argument with your wife
or your neighbour? Of course, it will affect your motivation at work. In fact, me I
personally motivate myself from home but sometimes when I come to work some
things really get me angry or put me off, but I try to maintain that motivation I came
from home with or else I will not be productive during the day. So yeah it is important
as well.” Staff Interviewee 002 also had a similar response saying, “When you’re not
personally motivated there is nothing that an external person can do to motivate you.
You are the one in the job. There will be incentive motivations, appraisal motivations
but once you don’t have internal motivation it cannot reflect well in your job.”
Looking at these responses, it is evident how they emphasize the importance of
intrinsic motivation themselves. Staff interviewee in his response even implied that it
is more important to the employee than even extrinsic motivation like incentives. He/
She stated that once you do not have internal motivation, no matter what incentives
are put in place for an employee it will not reflect in your output. This is consistent
with what Kuvaas (2006) brought out in his article that both performance appraisal
satisfaction and employee outcomes mediated and moderated by employees’ intrinsic
work motivation. Once the effects of extrinsic motivation can be complemented by
intrinsic motivation organizations should make it a point to develop schemes in
improving the intrinsic motivation of employees (Fatma, 2017). Unfortunately, the
scope of my study does not cover that, but that study could shed new light on
improving employee motivation.

4.3 Findings from Winmat Publishers Limited
Winmat Publishers Limited is a publishing firm which started operations from
December 1996 and is actively involved in local publishing and the distribution of
Winmat publications. The company was formerly Macmillan Publishers but changed
their name to Winmat Publishers Limited as part of rebranding efforts. The company
is currently involved in the publishing of textbooks, atlases, wall maps, wall chats,
globes and supplementary readers for pre-school, primary, secondary, and technical
institutions. The company also publishes books for various professions and for
general reading. Winmat also markets and distributes books countrywide as well as
publish for Sierra Leonean and Liberian markets, through various
booksellers/bookshops, libraries and by direct contact with schools and other book
users.
In the interview with the general manager of Winmat he explained that majority of
the work was outsourced to agents who act as their marketers and sales personnel.
Their business model is quite different where unlike the usual publishing firm have
their own in-house marketers. However, they manage to put in place an appraisal
method for their employees including their sales agents. He explained that at the
beginning of every year they have a sales forecast and every representative/agent is
given a percentage of the sales forecast. However, this percentage is discussed with
the sales representative and a percentage is then agreed upon before finally used in
operation. At the end or beginning of every year the sales representatives in the
various regions are then evaluated on their ability to meet their sales target which is
the percentage agreed upon at the beginning of the year. There is no formal sit-down
with the employee to discuss his performance rather the appraiser, who is familiar
with the employee’s work, such as a department head, will fill the appraisal form
which covers performance based on sales targets and other attributes such as
punctuality, hard work and respect for authority. These performance appraisal forms
have options for recommendations for increase in commission, which goes with a
promotion, or an option. He went on to say these sales representatives are paid by
commission on the books they sell.
4.3.2 How do performance reviews impact the motivation of an employee?
Performance appraisals in this firm is unlike how other firms carry out
performance appraisals this is because their work is in away outsourced to marketers
who are not necessarily part of the firm but work on behalf of the firm. This is unlike
traditional firms who have their staff in-house. I could deduce from the interview that
performance reviews affect the performance of employees since they can increase
their commission based on promotion or could possibly result to their sales contract
being terminated. Staff Interviewee A1 said in the interview, “The performance
appraiser can recommend to the CEO to increase your pay, so I am always motivated
to work harder because as a sales man I live by my commission, so I have to work
hard so that my commission margin can be recommended to be increased.” When
asked whether performance appraisals affect his/her motivation to work, the
interviewee said, “It depends. It depends on what comes out from the appraisal. If it’s
good you take it like that, if it’s not then it means you need to work harder.” Staff
interviewee A2 also had similar comments on how performance reviews affect his/her
motivation at work. The interviewee mentioned, “Here we do commissioned work; if
you want to make more money you need to push harder so that if they are filling the
appraisal form you could be recommended for a raise. Usually when you miss your
target it challenges you to work better the next year so that you will be able to get that
raise you want.” This shows that performance reviews in this firm are likely to affect
the motivation because of the incentives attached to it. Incentives being attached to
performance reviews may not only be the source of motivation for the employee but
from the responses, it looks like a major factor. Other factors may rise for the desire
for one to achieve his targets. This result is like findings from, “What Makes
Appraisals Effective?” by Lawler, Benson, and McDermott, (2012), which states that
appraisals which have monetary consequence, and, in this case, career related
consequences often tend be taken more serious by the employees and such is the case
of this company per the responses received from the interview. Thus, in this
organization, management of the company ought to pay more attention to their
incentives on the appraisal form to keep their staff motivated for the job.

firm/organization?
This organization has a peculiar operations model which sees its salesman
employees as an integral part of their operations. Thus, once an employee is not
motivated to market and sell their books, it will affect the company even more than
the employee although his salary is based off commission on the books sold. This is
because the employee can choose to take up another firm’s book to sell since there is
no an exclusivity clause in their contract. Speaking to their management interviewee,
he/she highlighted that one of the risks of operating this business model lies in the fact
that these sales people may not sell their books solely but could take up other titles as
well. He/she said in the interview, “It is very risky to not motivate your employees
and, in our case, if we do not do so we risk the sales agents concentrating their work
on other titles not ours after all they will also be given commission from there too.”
This response highlights the potential outcome the motivation of their staff has on
their output as a firm. Although I cannot show their organizational data to prove this
point, it is worth considering a likely outcome based on the response of a member of
management. On the positive side once, employee motivation is high it will cause
these employees to market and sell more books and even reach their target based on
the motivation they have. It is important to note that based on their business model, an
employee’s motivation is even more important than in traditional firms that pay
regular salaries.
4.3.4 Incentives
For this particular firm incentives are a great part in motivating an employee
through performance appraisal. The company attaches incentives such as promotions
which come in the form of increased commission as well as increased target of sales.
Their incentives as a company takes the form of extrinsic motivation, particularly
monetary related. This is because the sales employees work individually and on
commission in respective regions thus instituting recognition schemes such as
employee of the month will not prove much motivation for the sales employees.
Hardly do some of these employees even meet or interact since their stationed in
different regions of the country. Staff Interviewee A1 speaking on incentives
highlighted in the interview, “Our whole work is based on commission, the incentives
are just an add up to make us push harder and achieve our target because it means
the next year if you are promoted you will get a slightly higher commission and you
know when working such number of books, any small increase in percentage of
commission may come out as a lot of money so yeah.” Aside what is provided through
performance appraisal there are no other incentive packages provided for these
employees thus by default, these employees are incentivised to work harder to achieve
their targets to earn some of these incentives and that is good for the organization.
Staff interviewee A2 also in response to the question on incentives said the following,
“Incentive to work is the commission, if you don’t work you don’t eat. It’s up to you to
work harder and maybe get a promotion at the end of the year so really, it’s up to you
the individual.” This response on the other hand shows elements of intrinsic
motivation, where the respondent shows that it us up to the employee to make it or
not. In the phrase, “if you don’t work you don’t eat” shows that one must have a level
of personal motivation to succeed in the market. Although the company offers some
extrinsic information through their performance appraisals, one must internally
motivate himself to be able to meet his/her target. The respondent states that it is up to
the individual to make it as well. In this situation there is not much the organization
can do to improve the intrinsic motivation. However due to the model of operation of
the institution works well to keep the employees motivated internally since that’s the
only way they can earn their commission.
4.4 Conclusion
Looking at both companies it is evident that performance appraisals have one
effect or the other on the motivation of an employee, particularly in a positive light. It
is worth noting the motivation of an employee is most likely affect the productivity of
a firm because the productivity of a firm is incumbent on the productivity of its
employees. From Shelton’s performance formula, we see how important motivation is
important in the performance of an employee sine it has the power to reduce the
performance of the employee by half when there is a lack of motivation thus proving
to organizations how important it is.

The first key finding in this chapter is that with one of the organizations namely
Kabkork, non-monetary incentives tend to boost the intrinsic motivation of the
employee whilst monetary and career related incentives tend to boost their extrinsic
motivation. Recognition schemes that tend to praise the employee often lead to
satisfaction of the employee emotionally and psychologically, in the process boosting
their intrinsic motivation. Likewise, incentives such as increase in salaries and
promotions tend to motivate the employee as well, and this is evident also in Winmat
Publishers.
The second key finding from Kabkork Publications is that perceptions of fairness
and objectivity can affect the effectiveness of the performance appraisal in the role of
motivating an employee. Once an employee perceives that a performance appraisal
was not done with objectivity or fairness, he or she is most likely to leave the
performance appraisal without adding on to their motivation and this can be
detrimental to firm, taking into perspective the equity theory, where an employee will
adjust his output ratios when he perceives unfairness and especially where
performance appraisals do not reflect the input of the employee, he/she is likely to be
dissatisfied.
The third finding from this chapter is that between the two companies the
employees identified personal motivation or intrinsic motivation as more important
than extrinsic motivation. Intrinsic motivation is more likely to affect the performance
of an individual than extrinsic motivation because intrinsic motivation not only affects
their motivation but potentially their psycho-emotional well-being as well, thus
making it very important and integral to keeping an employee motivated.

The findings in this chapter are limited to the two companies and cannot
necessarily be generalized to the entire population. The next chapter will put the
whole study in summary and go over the objectives for the study, the literature
review, the methodology and the finding and analysis.

CHAPTER 5: CONCLUSION
5.1 Summary
This chapter contains the summary of the entire body of work from the
introduction, literature review, methodology and findings/analysis. This chapter also
consists of key findings and recommendation for future studies.
From the introduction the reason for this study is that there are some issues
with how performance appraisals in some companies in Ghana are carried out and this
may lead to the demotivation of the employee. In a study by (Horsoo 2009), he
discovered that some employees of Barclays bank Ghana felt that performance had
been turned into a discriminatory, punitive and/or judgmental process, where
cronyism and biased considerations dominate rather than objectivity (Horsoo, 2009).
This led to setting the objective of the study, which is to find out the effect of
performance appraisals on employee motivation in two publishing companies and to
see if it influences the output of employees and the potential outcome on the firms.
Related literature review revealed some work had been done on the topic but
mostly on other continents. Kuvaas (2006) in his article revealed that both
performance appraisal satisfaction and employee outcomes are mediated and
controlled by employees’ intrinsic work motivation. Kampkotter (2016) also showed
in his work that performance appraisals which are combined with extrinsic rewards
(monetary and career-related consequences) are a powerful human resource
management tool that is appreciated by employees. Cloninger & Selvarajan (2012)
showed that performance appraisals which the employees perceived as fair had a
positive effect on employees’ motivation and job satisfaction and employees preferred
intangible appreciations such us respect and dignity than rewards that came in the
form of outcomes.
The methodology employed by for this research was exploratory since there is
not much work on it. The population consisted of the employees of the two companies
and the sample was selected by purposive sampling. The mode of data collection was
through face-to-face interviews and the findings were analysed based on the research
questions and thematic analysis.
5.2 Key Findings
The first key finding in this research is that non-monetary incentives often
tend to boost the intrinsic motivation of the employee whilst monetary and career
related incentives tend to boost their extrinsic motivation. Appreciation awards that
acknowledge the employee often lead to satisfaction of the employee emotionally and
psychologically, in the process boosting their intrinsic motivation.
The second key finding is that perceptions of fairness and objectivity of
performance appraisals can affect the effectiveness of the performance appraisal in
the role of motivating an employee. Once an employee perceives that a performance
appraisal was not done with objectivity or fairness, he or she is most likely to leave
the performance appraisal without adding on to their motivation and this can be
detrimental to firm, taking into perspective the equity theory, where an employee will
adjust his output ratios when he perceives unfairness and especially where
performance appraisals do not reflect the input of the employee, he/she is likely to be
dissatisfied.
The third key finding is that personal motivation or intrinsic motivation have a
mediating effect on extrinsic motivation making it very important. Intrinsic

motivation is more likely to affect the performance of an individual than extrins ic
motivation because intrinsic motivation not only affects their motivation but
potentially their psycho-emotional well-being as well, thus making it very important
and integral to keeping an employee motivated.
5.3 Recommendations
For further studies one can consider conducting this study on a different
population and a larger sample to get more varied responses. One can also decide to
match the responses to organizational data to investigate the outcome of an
employee’s motivation on a firm empirically.

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APPENDIX
Kabkork Publication Interviews
Interview 001
Interviewer: Hello sir, good afternoon
Management Interviewee 001: Good afternoon and how are you doing?
Interviewer: I am fine by God’s grace. I want to conduct an interview with you to
talk about the appraisal process in the organization.
Management Interviewee 001: Okay, what do you want to know about it?
Interviewer: Well I will like it if you could run me through the process of appraisal
in the company.
Management Interviewee 001: Okay over here we’ve had three forms of
performance appraisal and I’m going to take you through all of them. So in the first
one we used to do the supervisor tells the worker about his/her targets that the staff is
to reach by the end of the year and scores him at the end of year according to the level
of satisfaction of the supervisor on the performance of the staff. You get it?
Interviewer: Yeah.
Management Interviewee 001: Ok. The supervisor then gives the staff an
opportunity to respond to the score given him, whether he agrees with it or has a
disagreement with the score given him. There is a column on the appraisal form
where he lodge his complaints and it ends when it is submitted to the HR person. Did
you get that?
Interviewer: Yeah I did.

Management Interviewee 001: So the second one we implemented which was an
improvement of the first one was that the supervisor decides targets but gives
opportunity to the staff to sit and discuss the feasibility of the target. After reaching an
agreement, the shows it to the staff. The staff has the opportunity to agree or disagree
and if he has any comments about the performance he can write it in a column on the
appraisal form, okay?
Interviewer: Yes please.
Management Interviewee 001: The third and current appraisal process we use has
three aspects. The first one is performance plan where a performance plan is discussed
with the staff according to the company’s plan of action. The performance plan details
an aaction plan for the four quarters of the year with each activity accorded a
percentage which counts towards your final grade at the end of the year. Every staff is
expected to make at least 80% of their target. For every said activity, upper and lower
limits would be agreed on and signed by both parties which will be the working
document on which performance appraisals will be based on. The second aspect we
look at behavioural aspect of the staff too. Whether he is friendly or not. Every
quarter will be assessed and the performance plan would be matched tp their actual
performance. The third part is that after quarterly assessment training needs may be
identified and recommended for the staff. Here too promotions can be recommended
as well as dismals. We also do a three year appraisal compilation to award
hardworking staff. Is this okay?
Interviewer: Yes it is, thank you for your time.

Interview 002
Interviewer: The first question I’ll ask is how long you have been with the company?
Staff Interviewee 001: I have been here for two years.
Interviewer: So you have gone through performance appraisals here before?
Staff Interviewee 001: Oh yeah, once.
Interviewer: So how would you describe the performance appraisal process in the
company?
Staff Interviewee 001: I think in terms of grading you can grade the performance
appraisal process to about 60%-70% because it is not done continuously so it is a
system which is not that effective.
Interviewer: Can you narrate the feeling you had after going through performance
appraisals here in the company.
Staff Interviewee 001: Personally I think I’ve had opportunities to have my
performance appraised by boss. Personally I think I was operating at my own level,
standard because over here the environment is such that you can work at your pace
but during the appraisal process boss pushed and challenged my standard up so I
believed I could do better.
Interviewer: So how do you feel after such an appraisal?
Staff Interviewee 001: I feel motivated.
Interviewer: You mentioned that you feel motivated after such a process. Does it
affect your performance at work?

Staff Interviewee 001: Yeah it does. It makes me challenge myself all the time at
work. I was operating at a standard I felt was okay but after that the appraisal I felt
like I had to do more.
Interviewer: So you personally, how much does your personal motivation affect your
job performance.
Staff Interviewee 001: Oh as for that one dierr, it affects your performance because if
there is something on your mind you can’t work well in the office. If you’re happy
you will work more faster and well if you’re not you won’t.
Interviewer: Ok so if you look at the performance appraisal in this company are there
any incentives to boost the employees’ motivation?
Staff Interviewee 001: There is an incentive package that we have at end of every
year I think I have tasted one before the sharing of hampers and then I think the
marketing team also have an incentive package when you meet your target you are
rewarded.
Interviewer: Okay, thank you for your time that will be all.
Interview 003
Interviewer: How long have you been with the company?
Staff Interviewee 002: Just one year
Interviewer: Have gone through performance appraisals here before?
Staff Interviewee 002: Not yet, but at my other workplace.
Interviewer: Can you tell me about it?
Staff Interviewee 002: I have done it to some people and I have also been appraised.
The publishing firm that I was, we do appraisals every week on things like
punctuality, dressing, how you carry yourself about as well as performance based on
some key performance indexes but the performance based appraisal is done on a
monthly basis. The weekly appraisals are compiled at the end of the month as well as
the monthly performance appraisals with the view to reward and punish not punish
per se but to keep those who are not performing on their toes.
Interviewer: You mentioned that you appraised others and were appraised.
Staff Interviewee 002: Yeah, I was appraised by the CEO based on the performance
of those under me. If they did well it means me too I will be appraised well.
Interviewer: Have you ever hard a negative experience during or after a performance
appraisal?
Staff Interviewee 002: No, It rather challenges me to give in better effort. When I go
into our weekly appraisal and it doesn’t go well I rather leave challenged to do better.
Interviewer: So what you are saying is that it has an effect on your motivation at
work.
Staff Interviewee 002: Yes it does. Positively positively.
Interviewer: Would you say that your personal motivation may affect your
motivation to work?
Staff Interviewee 002: Errm it is true. When you’re not personally motivated there is
nothing that an external person can do to motivate you. You are the one in the job.
There will be incentive motivations, appraisal motivations but once you don’t have
internal motivation it cannot reflect well in your job. Assuming you’re coming to
work and you do not feel like coming, your output that day will not be the best
because personally you’re not motivated so no matter the incentive that will be put in
place since it is within you, you will not produce the best.
Interviewer: Would you say incentives also boost the motivation of the employee
because you said there are incentives in place to boost the motivation of the
employees?
Staff Interviewee 002: You see, motivation comes in different ways; even the for the
fact that you’re being mentioned in front of your colleagues that oh, this person is the
employee of the month. So that alone even without any cash, that feeling alone that oh
I’ve been adjudged the best amongst my colleagues, it will really motivate you.
Interviewer: Okay, thank you for your time.

Interview 004
Interviewer: The first question I have is how long you have been with the company?
Staff Interviewee 003: I have been with company for about four (4) years.
Interviewer: Okay, how would you describe the appraisal method of the company?
Staff Interviewee 003: I think basically it’s a straightforward process you don’t need
to bother yourself too much. At the beginning you know what is expected of you to
achieve so you can just focus on that and try your best to reach your goals.
Interviewer: Okay so can you describe how you felt after going through one of these
performance appraisals.
Staff Interviewee 003: Oh I felt challenged to do more. You see, when you go for
performance appraisal because you have already signed the performance plan
document, you can’t have excuses for not meeting up so it rather encourages me to do
better in the nest quarter or the next year if it is the yearly one and if you check over
the years I have been improving my sales percentage so yeah it motivates me to
achieve more.
Interviewer: Have by any chance had any negative experience after going through
the appraisal process.
Staff Interviewee 003: Errrm, no. Not that I can recollect. You see I believe it is a
process where you get to know where you can improve. You see it’s all about how
you approach it. If you approach it trying to learn something it will be beneficial for
you, you know.
Interviewer: Do you see any difference between the previous performance appraisal
methods and the current one.

Staff Interviewee: Errrm, you know what, the earlier ones sometimes it leaves room
for one to be sceptical about some of the results after performance appraisals because
we were only judged based on target sales and the judgement of the supervisor but
this new one is more scientific and straightforward so everything is fair. My appraisal
score has increased and so has my output.
Interviewer: Ok, sure. So will you say performance appraisals have an effect on
your motivation at work?
Staff Interviewee 003: Of course, I told you that when after performance appraisals I
feel motivated to do my better than current state so yeah that’s it.
Interviewer: Does your personal motivation affect your motivation to work?
Staff Interviewee 003: What do you think? What do you think will happen if you
come to work feeling down from home because maybe you had an argument with
your wife or your neighbour? Of course it will affect your motivation at work. In fact
me I personally motivate myself from home but sometimes when I come to work
some things really get me angry or put me off but I try to maintain that motivation I
came from home with or else I will not be productive during the day. So yeah it is
important as well.
Interviewer: Thank you for your time.

Interview 005
Staff Interviewee 004: 5 years now..
Interviewer: How would you describe the performance appraisal method in the
company?
Staff Interviewee 004: The appraisal method is interactive and fair. It allows
everyone to know what is expected of them in every situation throughout the entire
year and it leaves room for interaction with the boss to even get advice if any
difficulty arise.
Interviewer: How do you feel after going through the performance appraisal process?
Staff Interviewee 004: I always feel motivated to perform better after going through
performance appraisal. It challenges me to go beyond what I’m already doing and that
keeps me ready all the time for the challenge because this work is not easy.
Interviewer: Have you ever had a negative experience during performance appraisal?
Staff Interviewee 004: No; not that I can recollect.
Interviewer: Do performance appraisals affect your motivation to work?
Staff Interviewee 004: Yes it does, it does. When you go into performance appraisal
you have an idea of what will happen because it is your performance so you have an
idea of what will happen. So if you go and you’re praised it is plus for you. If you go
and it is so great then you will be challenged for the next year.
Interviewer: Does personal motivation affect your motivation to work?

Staff Interviewee 004: Yes it does. How you feel affects how you work. Your
personal goals also affect your level to achieve so it’s all part of it.
Winmat Publishers
Interview A
Interviewer: Hello sir, can you explain to me how you go about performance
appraisals in your organization?
Management interviewee A0: Okay so in the first place, majority of the work is
outsourced to agents who act as our marketers and sales personnel or sales
representative. However put in place an appraisal method for these sales agent
employees. So at the beginning of every year they have a sales forecast and every
representative/agent is given a percentage of the sales forecast. However, this
percentage is discussed between the sales representative and the general manager and
then a percentage of the sales forecast is then agreed upon before finally used in
operation. At the end or beginning of every year the sales representatives in the
various regions are then evaluated on their ability to meet their sales target which is
the percentage agreed upon at the beginning of the year. There is no formal sit-down
with the employee to discuss his performance rather the appraiser, who is familiar
with the employee’s work, such as the department head, will fill the appraisal form
which covers performance based on sales targets and other attributes such as
punctuality, hard work and respect for authority. These performance appraisal forms
have options for recommendations for increase in commission, which goes with a
promotion, or an option to axe the employee due to non-performance. These sales
representatives are paid by commission on the books they sell so really much work is
left to their autonomy.
Interviewer: Ok thank you for your time.

Interview A1
Staff Interviewee A1: I’ve been here for 4 years now.
company?
Staff Interviewee A1: Oh it is straightforward and cool. You’re judged by how many
books you sell so it is cool. They also appraise based on your attitude as well, like
how punctual you are and how respectful you are.
Staff Interviewee A1: I feel challenged to go out there to increase my sales margin
especially when I feel like I was close to a raise or promotion, it ginger’s me to work
harder.
Interviewer: Do incentives also come to play here, as in how important are they?
Staff Interviewee A1: Our whole work is based on commission, the incentives are
just an add up to make us push harder and achieve our target because it means the
next year if you are promoted you will get a slightly higher commission and you
know when working such number of books, any small increase in percentage of
commission may come out as a lot of money so yeah.
Staff Interviewee 004: Not at all. Not at all.

Staff Interviewee A1: It depends. It depends on what comes out from the appraisal.
If it’s good you take it like that, if it’s not then it means you need to work harder. The
performance appraiser can recommend to the CEO to increase your pay so I am
always motivated to work harder because as a sales man I live by my commission so I
have to work hard so that my commission margin can be recommended to be
increased.
Staff Interviewee A1: Personal motivation works here since it is a commission work.
If you do not set your own goals and encourage yourself you will not be able to
perform in the market.

Interview A2
Staff Interviewee A2: For about three years.
company?
Staff Interviewee A2:
Staff Interviewee A2: I feel motivated to say the least. I feel like some fresh energy
has come for me to work with so I put in my all to deliver my best so that I can
improve on my performance.
Staff Interviewee A2: I can’t remember going through such before.
Staff Interviewee A2: Here we do commissioned work; if you want to make more
money you need to push harder so that if they are filling the appraisal form you could
be recommended for a raise. Usually when you miss your target it challenges you to
work better the next year so that you will be able to get that raise you want.
Interviewer: Do incentives here motivate the employees?
Staff Interviewee A2: Incentive to work is the commission, if you don’t work you
don’t eat. It’s up to you to work harder and maybe get a promotion at the end of the
year so really, it’s up to you the individual.

Staff Interviewee A2: Yeah one way or the other it does because it is the vim, the
energy you take to work. Now if you the person, does not have the inner vim to work
then master all that you’re doing will be difficult for you because sincerely it our own
motivation that keeps us going.
Interviwer: Thank you for your time.

Kirk Kabu Caesar
Capstone thesis project
Project topic: The Effect of Performance Appraisal on Employee Motivation: A Study

on Two Publishing Firms in Tema
Research Interview Questions
1) How long have you been with the company?
2) How would you describe the performance appraisal method in the company?
3) How do you feel after going through the performance appraisal process?
4) Have you ever had a negative experience during performance appraisal?
5) Do performance appraisals affect your motivation to work?
6) Does personal motivation affect your motivation to work?

Caesar Kirk 2018 BA Thesis

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Ashesi University College

THE EFFECT OF PERFORMANCE APPRAISAL ON EMPLOYEE

KIRK KABU CAESAR

Undergraduate thesis submitted to the Department of Business Administration, Ashesi

Supervised by: Dr. Enyonam Kudonoo

writing my undergraduate thesis. I will like to say thanks my supervisor Dr Enyonam

Kudonoo to having patience and guiding me through writing my undergraduate thesis.

of it has been presented for another degree in this university or elsewhere.

Candidate’s Signature: ..............................................................................

Candidate’s Name: Kirk Kabu Caesar

Date: April 2018

The purpose of this study is to find the effect of performance appraisals on

motivation of employees and consequently, the potential productivity of the firm.

performance appraisals in motivating employees. Based on these findings, it is

systems to boost the motivation of their staff for high productivity.

Keywords: Performance appraisal, Employee motivation, Effects

4.2.2 How do performance reviews impact the motivation of an employee? .......... 27

1.1 Background of the Study

Performance appraisal is essential to most organizations because it is the most

is happy and motivated. An appraisal can therefore be described as a process in which

employee’s performance is evaluated based on a set boundary, agreed time frame,

performance appraisal is the process of evaluating the way in which someone is

functioning based on set standards.

Effective performance appraisal has several benefits both to the organization

to enable employees to improve their performance on the job. Results of performance

appraisals enable employers to give appropriate rewards and incentives to employees

improve performance or for promotion and career development. Other benefits of

improvement or reinforcement of performance. Performance appraisals are also

organization. Performance appraisals provide a recognized, recorded, customary

assessment of an individual’s routine, and a sketch for potential enlargement.

( Panagar, 2009). These benefits show the importance of appraisal to organizations.

According to Donegan (2002), "success will to a larger extent depend on the

performance of an employee against standard or goals set by the organization and

even take corrective actions if need be. (Fatma, 2017)

According to Bennet (2002), employees of an organization are vital to the

accomplish its work (Chaponda, 2014).

1.2 Statement of the Problem

to play when employees are compared to fellow employees by their managers or

supervisors, without considering personality differences, which affects the morale of

Dikmenli, 2007). This generates inaccurate performance appraisals of employees and

which is designed to be a developmental tool to enhance performance, had been

biased considerations dominate rather than objectivity” (pp. iv)

From observation a significant number of Ghanaian employees have been

use performance appraisals as a form of vendetta, to give low scores to employees

same way about performance appraisal ratings. In some companies especially

and colleagues feels like a master-servant relationship.

For an employee to deliver on the job he/she needs a conducive work

environment to be able to work productively to deliver results desired from his/her

superiors. If performance appraisals are possibly hampering this conducive working

environment, then it is worth undertaking and discovering the relationship between

performance appraisals and employee motivation to help managers know, appreciate

and advise themselves on how to effectively conduct employee performance

light on how to effectively conduct appraisals and the consequences on the

organization if they fail to do so.

1.3 Theoretical Framework

theory of motivation which was introduced by BF Skinner; an American psychologist,

consequences tends to be repeated and improved, but individual’s behaviour with

as intended. A good performance appraisal should contain constructive feedback,

appraisals are carried out inaccurately it makes performance appraisals an unfair

measure of an employee’s performance. Wrong use of appraisals to settle scores are

employee performing poorly to the detriment of the company.

abilities to respond to positive or negative criticisms may be a factor in this theory.

experience and abilities. There is a positive correlation between efforts and

1.4 General Objective